In the last 70 years, technology gaps in defence have increased hugely. US and Russia are far ahead from rest of the world in making arms and armaments.

One of the world’s four airworthy Zero fighters sits on the tarmac in August 2011 in California, decked out in its full Pacific War livery. (Image courtesy – ajw.asahi.com; source – Masahide Ishizuka)

big drawback that hobbled Japan in WWII was oil. Japan had aircraft carriers and fighter aircraft – but little oil. In each battle, in the decisive stages of the WWII, oil was in short supply. By the start of WWII, Japan was prepared for war, with its Zero fighters.

In the last 70 years, technology gaps in defence have increased hugely. Countries like India have decided to build their defence capability by importing the latest and the best on one hand. On the other hand, India has launched ambitious R & D projects that are getting close to world standards.

US and Russia are far ahead from rest of the world in making arms and armaments. Coming close to these countries will take decades and billions of dollars – two things that very few countries have. For instance, few countries in the world (US, Russia, UK, France, Italy) can make world-class jet engines for fighter aircraft. Even countries like Japan and Korea, with a strong electronics and industrial base depend on defence imports.

For WWII, Japan produced more than 10,000 fighters – including the famed Zero fighter.

Masahide Ishizuka, 52, a New Zealand resident originally from Tochigi Prefecture is campaigning to bring one of the four airworthy Zero fighter aircraft in the world back to Japan, where it can fly again in the skies of its homeland.

This economic ‘trick’ of higher wages, profits, turnover, prices – and a higher GDP creates a brilliant optical illusion. It is called progress.

Was this cartoon a Government effort at building popular opinion on immigration in 1921 – before the passage of the Immigration Act (1924)? | A 1921 cartoon from the US Library of the Congress. Creative and publication credits not available at source.

Using over-generous debt, workers can ‘buy’ the latest cars, toasters and lawn-mowers – which creates an illusion of economic well-being. The vast numbers of workers are tied down by increasing amounts of debt – and taxes.

Dos this ‘wealth’ give them freedom? Liberty?

Not if look at the number of people who are in prison. Who are bankrupt and indebted. Who die penniless. But as long as long as you do what the powerful elite wants you to do, you can have the latest cars, toasters and lawn-mowers.

But …

This illusion can be kept standing, only as entry into the labour pool remains low and limited. This ties in neatly with low-marital rates – and low birth rates. in OECD countries. Low birth rates mean labour shortages – and need for immi-grunts.

High wages attract immi-grunts…

While making promises on one side – and erecting new obstacles. | Published: Wednesday, February 20th, 2013; Immigration Reform cartoon by by Clay Bennett; source & courtesy – timesfreepress.com

And …

To a country like Britain also …

This line of immi-grunts allows British media to be gross and ill-mannered. It gives them the right to talk of ‘booting’ and ‘kicking’ people. Like in this report.

A Home Office report says there may be as many as 863,000 illegal migrants – 70 per cent of whom are living in London.

The study also reveals that 10,000 foreigners who had no legal right to live in Britain have been granted permission to stay under the so-called 14-year rule.

It means they managed to stay in the country for so long without being booted out that the Government has now given up the fight.

The illegal immigrants are a mixture of those who sneaked into Britain in the back of lorries and those who arrived on visas but never went home.

The ‘robust estimate’ of how many illegals are living in the UK comes from the London School of Economics, and is included in a study titled Practical Measures for Reducing Irregular Migration. The LSE found there were between 417,000 and 863,000 illegals living in the UK, with a central figure of 613,000. Ministers accept the figures.

The Home Office says the top five countries from which the illegals have arrived are believed to be India, Nigeria, Pakistan, China, and Bangladesh.

This is based on the nationalities of those people the authorities have detected.

Earlier this month, the official Census showed that 7.5million people who were born abroad were living here in 2011, of whom more than half have arrived since 2001.

The Home Office study sets out for the first time how many beneficiaries there have been of the 14-year rule.

This states that, once a migrant has lived in the UK for this long, he or she will have established a right to a family life and should not normally be kicked out.

What would be just great is if Brazil decided to throw out British businesses – who are seeking to exploit Brazilian opportunities.

Theresa May, the British home secretary, faces a row with cabinet colleagues over proposals to impose visa restrictions on Brazilians, underlining the tensions between the search for economic growth and the need to recognise public concern over immigration.

Ms May’s plans to tighten rules for Brazilians is a serious test for the coalition, as it tries to balance conflicting priorities. Ministers fear the restrictions will cast a shadow over British relations with Brazil, a fast-growing economy that David Cameron has targeted as a key trading partner for Britain. The Home Office is already fighting criticism from tour groups and UK luxury retailers that the complex process of obtaining a tourist visa in China is preventing high-spending Chinese nationals from entering the UK.

Mr Cameron and Nick Clegg, deputy prime minister, have both visited Brazil since the election and have tried to bolster trade links. But Ms May believes the country is also the source of much illegal immigration to Britain.

The home secretary will propose ending the current agreement, which allows Brazilians to visit Britain for up to six months without a visa. Her suggestion comes as countries such as the US and Australia are taking the opposite course by easing visa restrictions with Brazil, to encourage tourism and business ties.

William Hague, foreign secretary and George Osborne, chancellor, are among those who have clashed with Ms May over her operation of Britain’s visa regime.“The Home Office is in favour of new visa restrictions but everyone else in the cabinet is basically against,” said a person involved in the discussions.

Lord Mandelson, the former Labour minister and EU trade commissioner, said the idea was “certifiably mad”.

Only last summer, Mr Cameron visited São Paulo and Rio de Janeiro accompanied by a 58-strong business delegation, to develop better trade ties with the $2.3tn-a-year economy. According to UK Trade & Industry, 14 government ministers have visited Brazil over the past 18 months.

Home Office figures for 2011 show that Brazil is fifth in the top 10 of illegal immigrant nationalities in the UK, with more than 2,000 forcibly removed that year.

The report suggests that many of the Indian, Chinese and perhaps Pakistani long-stay migrants are students. In terms of all visitors and migrants into the UK, the report states: ‘Citizens of the United States of America (USA) comprised 32 per cent of total non-EEA admissions, the nationality with by far the most admissions, representing an increase of 6 per cent to 4.1 million in 2006. The next three nationalities with the highest numbers of admissions were Australia (up 8 per cent to 1.1 million), Canada (up 11 per cent to 1.0 million) and India (up 23 per cent to 0.8 million).’

It is likely that most illegal immigrants are from North America and white Commonwealth countries.

According to the Institute for Public Policy Research, few people sneak into the country undetected so most illegal immigrants are overstayers, or people who stay in the UK beyond their entitlement.

There are few figures concerning overstayers by country. When Australia checked their overstayers in 2005, they found the top countries were the US and Britain.

British Economy: What solution? Import another 100-Lakshmi Mittals+Ratan Tatas..

British companies are making third-grade acquisitions abroad – which is not helping British industry to stay the course | Cartoon on Jan 15 2013 by Randy Bish via Cagle.com

he combined debt of the UK economy – State, Corporate and household debt is at a staggering 500% of the GDP. This is the debt that the UK economy has to support. Assuming weighted average interest rates on this debt is at a low 5%, it means that the UK economy is spending 25% of its production on interest payments.

Since the savings rate of the UK is low-to-negative, it means that the UK economy will borrow more – just to make interest payments.

What could be a solution?

Massive inflation to get this debt down quickly.

Or slowly ratchet down the debt, and write-offs, low-inflation, and desperate prayers that the economy:

Hits another North Sea oil

Builds another 1000 ARM-chips kinds of company

Imports another 100-Lakshmi Mittals+Ratan Tatas.

How likely is any of this?

The UK has lost its top AAA credit rating for the first time since 1978 on expectations that growth will “remain sluggish over the next few years”.

The ratings agency Moody’s became the first to cut the UK from its highest rating, to Aa1.

The UK has had a top AAA credit rating since 1978 from both Moody’s and S&P.It added that the UK’s huge debts were unlikely to reverse until 2016.The UK’s net sovereign debt was the equivalent of 68% of the country’s annual economic output, or GDP, at the end of last year.All three major credit agencies last year put the UK on “negative outlook”, meaning they could downgrade its rating if performance deteriorates.Germany and Canada are the only major economies to currently have a top AAA rating – as much of the world has been shaken by the financial crisis of 2008 and its subsequent debt crises.

Germany’s National Firearms Register, which came into effect on Jan. 1, 2013, recently published its first statistics. A total of 5.4 million legal weapons are registered with private owners in the country. The most are registered in the state of Bavaria (1.1 million), followed by North Rhine-Westphalia (1 million) and Baden-Württemberg (700,000). Approximately 550 German authorities submitted data. The introduction of the register is broadly seen as a political reaction to killing sprees in Erfurt in 2002 and Winnenden in 2009. Moreover, the European Union has stipulated that all member states must launch central firearms registers by the end of 2014. Germany has the fourth highest per capita number of legal firearms, lower than the United States, Switzerland and Finland — but higher than Mexico, South Africa and Russia. Germany’s largest police union, the GdP, estimates there are up to 20 million illegal firearms in Germany.

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Now that Japan has joined the currency devaluation game, it leaves the Euro twisting in the winds of currency storms.

The yen, trading at about 87 per dollar, has shed about 11 percent since mid-November when Shinzo Abe, who became Japan’s new prime minister following elections last month, promised a more aggressive monetary policy. | Graphic source & courtesy – cnbc.com

iven a choice between a Japanese car and Chinese, almost any car buyer in the world will opt for a Japanese brand.

If price difference is small.

But as we know the price difference between Japanese and Chinese cars (and other products also) is rather big.

How the Yen has become expensive. From nearly 290 yen:1 USD to 80 yen:1 USD | Graphic credit – wsj.net

The big reason for this price difference?

The Japan Case

Though not the only reason, the high cost of the Japanese Yen after the Plaza Accord (September 22, 1985) has painted the Japanese economy into a corner.

Japan on Thursday reported a record annual trade deficit in 2012, the second straight year in the red for an exporting nation that has long built its wealth on its vast trading surpluses.

The annual trade gap of 6.93 trillion yen (about $78 billion) was brought about by surging fuel imports and a continued slide in machinery shipments and other mainstay exports. The deficit underscores the challenges Prime Minister Shinzo Abe faces as he tries to lift the world’s third-largest economy out of years of stagnation.

The deficit also brings to the forefront the risks that accompany Mr. Abe’s bid to revive the economy through government spending, which will add to Japan’s public debt, already more than twice the size of its economy. For years, export surpluses helped Japan finance that enormous debt without having to turn to foreign investors.

But that delicate balance is now unraveling. The global economic crisis set off a fall in Japanese exports, and also caused the yen to strengthen, weighing on the country’s competitiveness and recovery. The prolonged shuttering of the country’s nuclear reactors in the wake of the Fukushima crisis has led to a spike in Japan’s imports of oil and gas. A bitter territorial spat with China has hurt exports to Japan’s biggest trading partner.

The provisional data released by the Finance Ministry on Thursday showed exports continued to fall in December at a faster pace than forecast by economists, despite a weakening of the yen that should have come as a boon to exporters.

According to the data, Japan’s annual trade deficit jumped by 170 percent from the 2.56 trillion yen shortfall it recorded in 2011 to 6.93 trillion yen. Energy imports, mainly from the Middle East, surged, machinery and car exports fell across the board. By region, Japan’s exports to China tumbled by 10.8 percent, leaving Japan with a trade deficit of 3.52 trillion yen (about $40 billion) with its rising neighbor. Exports to the struggling European Union also fell by 15 percent.

Trade with the United States was brisk, however, with exports climbing 11.7 percent and imports by 2.5 percent for a 5.1 trillion yen (about $58 billion) surplus. Japanese automakers did particularly well in the United States last year, rebounding from production cuts brought about by Japan’s 2011 tsunami.

The expensive Yen has increased the price of Japanese exports. Decreasing export-growth due to an expensive Yen, has led to a 20-year economic stagnation-deflation situation in Japan – now referred to as Japan’s Lost Decades (失われた10年 Ushinawareta Jūnen).

Japan’s new government has vowed to revive the economy and expectations for aggressive monetary easing are running high. This sets the scene for the yen to weaken to the 100-mark versus the dollar.

The yen, trading at about 87 per dollar, has shed about 11 percent since mid-November when Shinzo Abe became Japan’s new prime minister last month, promised a more aggressive monetary policy.

Keen to tackle the deflation that has dogged Japan’s economy for years, “The yen has fallen quickly and once it gets going, it gets going. What kind of number (in dollar/yen) do you need to fight deflation? I think we need to see dollar/yen at 110, 20 to say you’re on top of the deflation problem,” Jerram added.

Inflation in Japan fell 0.2 percent in November from a year earlier, after a 0.4 percent decline in October. A weak currency, brought about by aggressive monetary easing would help boost inflation, analysts say.

Japan’s current account surplus fell 29.4 percent in October from a year earlier to 376.9 billion yen ($4.58 billion) on a fall in exports.

They say another reason to expect further yen weakness this year is a brighter outlook for the global economy, which means there is more incentive for Japanese investors to put their money overseas.

“Everything is in place for a move in dollar/yen to 100, the only constraint being resistance from other major central banks to anyone else adopting a weak currency,” Societe Generale said.

China’s Yuan has already appreciated to a 20-year high. In the current global scenario, China’s currency situation puts it in a weak situation. China’s economic engines will seize, if the Japanese Yen were to depreciate to ¥110-120.

EU’s Sports Complex

The interesting point is how EU manages its trade deficit. Without blaming China-Yuan.

Usually…

But in case of China and Yuan, Europe is not doing much of crying about the ‘undervalued’ Yuan. The Euro revaluation from USD 1.6 four years ago to USD 1.25 now is a recent affair.

So, not of much consequence. The Yuan undervaluation has been on the US agenda for a few years now – with varying intensities. Euro-trade balance with China is slightly in China’s favour. All in all, good management by the Euro-zone, it appears.

Which in the current scenario is the one-bright-spot on the Euro-horizon!

In today’s world, no significant group of countries is looking for currency strength. Some resist appreciation actively and openly; others do so in a less visible manner. Only the eurozone seems to accept being on the receiving end of other countries’ actions.

The German Footprint

Behind the Euro-zone is the Germanic template.

In the last twenty years, Germany has absorbed East Germany, without a hiccup. During the same period Japan entered into a deep stagnation-deflation phase – but not Germany. While the world succumbed to Chinese manufacturing onslaught, the German industrial complex kept humming – steadily. While the US economy stumbled from bankruptcy of the auto-industry to the dotcom bust and is now deep into the housing crisis, the German economy remained stable.

All this without seeking competitive currency devaluation.

countries nowadays, including systemically important ones, are already actively weakening their currencies. Yet, because an exchange rate is a relative price, all currencies cannot weaken simultaneously. How the world resolves this basic inconsistency over the next few years will have a major impact on prospects for growth, employment, income distribution, and the functioning of the global economy.

Why start a war that can be the end of Pax Americana! The US is happy flexing its muscles against the Iraqs and Afghanistans of this world. | By Tjeerd Royaards on October 06, 2010 | Source & courtesy – toonpool.com

India is investigating how Swedish-made weapons bought by its army turned up in Myanmar, a minister visiting Yangon said Dec. 15, denying New Delhi had supplied arms in contravention of EU sanctions.

Sweden asked India on Dec. 13 to clarify how the weapons wound up in Myanmar after it was revealed the Indian Army had purchased them,

Pictures taken in Myanmar and published in Swedish media this week showed a Carl Gustaf M3 anti-tank rifle and ammunition left behind by Myanmar government soldiers.

The weapon’s serial number is clearly visible in one of the photographs.

“One thing is clear … we are not in the business of supplying weaponry,” Salman Khurshid, Indian Minister of External Affairs, told reporters in Yangon.

“We will try to find out how this happened. It’s one weapon, isn’t it? In a very big world, one single weapon has been identified,” he said, adding that the Indian Army will check its inventory as part of the probe.

According to a story published in The (London) Independent, the Swedish weapons were used by Myanmar troops in their fight against ethnic Kachin rebels in the country’s far north.

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